Charting the route to net zero goals

What routes can Middle East governments take to transition to net zero?

There are multiple ways of achieving net zero. The most pragmatic, however, is based on renewable energy. To stay in line with the Paris Agreement goals, IRENA’s World Energy Transitions Outlook notes that renewables must provide 90 per cent of the global power supply by 2050, up from 26 per cent in 2019.

This figure reflects both market trends and the cost of renewables-based electricity, which is currently the cheapest power option in most regions. This is particularly true of the Middle East where recent power auctions have resulted in record-low solar prices at below $0.03 per kilowatt-hour.

Which countries are likely to pursue which routes and why?

Although the routes and trajectories vary per region, renewables will play a key role in transforming the Middle East’s energy system. Countries such as the UAE, Saudi Arabia and Bahrain have already put forward ambitious plans as part of their net-zero commitment to dramatically transform their energy economies and these are to be welcomed.

Due to the abundance of low-cost renewable power in the Middle East – supported by proximity to customers in Europe and Asia – the region possesses a competitive advantage in its ability to become a key green hydrogen hub.

Further cost reductions are also likely, due to the possibility for extensive retrofitting of pre-existing energy infrastructure.

What major obstacles must governments overcome to transition to net zero?

Achieving net zero requires a fundamental change in the way we produce and use energy, as well as a comprehensive policy framework conducive to clean energy investment.

This framework must also be inclusive, so the private sector can play an increasing role in financing projects. By engaging strategic and financial investors, governments in the region could diversify risks and develop valuable knowledge and expertise on finance and technology.

Can the region hit net zero targets with current clean energy build and commissioning rates?

There has been a significant increase in renewable electricity capacity investments in the region. The industry must accelerate the rate of investment, however, in order to realise the net zero pathways upon which many countries have embarked.

In 2021, total global energy transition-related investment was nearly $1 trillion, which represented a 21 per cent year-on-year increase. While this is laudable, to achieve a 1.5°C-compatible climate pathway, investment levels must be scaled up sixfold by the end of the current decade, in order to reach $5.7 trillion per annum.

Is the region building the required energy infrastructure fast enough?

Countries must invest significant additional effort to rebuild energy infrastructure for end-use electrification.

For example, governments should expand the existing charging infrastructure for electric vehicles and encourage highly efficient and more electrified buildings and building management systems.

They should also introduce regional market and regulatory mechanisms to promote cross-border power interconnection systems and cross-border pipelines for green gases.

How should governments manage plans for renewables and battery storage in combination with plans for nuclear and gas to meet net zero ambitions?

Renewable power technologies, which have become the cheapest sources of electricity in many markets, now dominate the global market for new electricity generation capacity. Over the last seven years, more renewable power was added annually to the global grid than fossil fuels and nuclear combined.

We do not see this trend reversing. Recent energy crises have only served to further solidify renewables as the most resilient and effective energy solution for the future.

IRENA believes that net zero by 2050 is indeed feasible, but only if efforts are co-ordinated among policymakers, the public sector and private sector stakeholders. IRENA will work closely with its member countries in the Middle East to support an inclusive energy transition that promotes clean growth, prosperity and sustainable development.

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